US consumers are proving to be true shopping maniacs, Commerzbank Head of FX and commodity research Ulrich Leuchtmann notes.

Retail sales rise by 1% vs 0.4% expected

“In July, retail sales rose by 1%, as the Census Bureau reported yesterday. Analysts had expected a meager 0.4%. The subcomponents of particular interest were also significantly stronger than analysts had expected. And because it is now a truism that the US consumer is ‘the engine of the US economy’, the retail sales figures at least helped to dispel some of the weakness of the USD in recent days.”

“We do not believe that the US economy is sliding into a recession either. In our view, therefore, the market reaction was not wrong. However, I would like to point out that yesterday's figures were not proof of one or the other view of the US economy. In a hypothetical coming recession, the US labor market would certainly only suffer damage with a time lag. And it is only then that the US consumer typically notices.”